Generally, when I prepare year end financial statements for my clients, I perform either of these 3 tasks:

1) I prepare everything and write up the books at the time of preparation of the company’s year end financial statements
2) I do the monthly accounting throughout the year, and then do the year end financial statements before continuing with a new fiscal year
3) The client has internal or part-time bookkeepers who do the monthly accounting and then I just perform the year end from information supplied to me.

One of these part-time bookkeepers on task 3) just couldn’t understand the concept of reconciling a bank and that brings back memories for me, because I used to work with people who had the exact same attitude, and always created problems with their short-cuts.

Here are a couple of posts I did back in 2006 regarding this topic if you want a refresher course:

* Reconciling both your BANK and CASH accounts – Part I
* Reconciling both your BANK and CASH accounts – Part II

IMAGINE THE FOLLOWING FACTS

* June 30, 2009 you receive your bank statement and it shows $1,680.00 ending balance

* June 30, 2009 you cheque book balance claims you should have $1,800.00 ending balance

THIS IS NOT RECONCILING YOUR BANK

* Adjust your cheque book balance to $1,680.00 to “reconcile” and agree to the bank balance

* Complaining to your bank manager that the bank balance should be $1,800.00 and to please put back $120.00 bank error immediately.

WHAT IS RECONCILING THEN?

Reconciling your bank is when you take each balance you want to “reconcile” to .. and come to the same and usually different balance. It is rarely one balance or the other balance and often in between the balances.

In this case, the “reconciled” bank balance is the final general ledger balance of “Bank” that we would want to see on our monthly statements or year end financial statements.

If you were to make a flow chart – it would look like this:

BANK BALANCE (bank statement)
\/
\/
RECONCILED BALANCE (financial statements – adjusted balance)
/\
/\
OUR BALANCE (cheque book register – unadjusted balance)

EXAMPLE – RECONCILIATION OF THIS BANK

(I)

Our Cheque Book Balance: $1,800.00

LESS: June Service Charges: ($20.00)

EQUALS: Adjusted Cheque Book Balance: $1,780.00

(II)

Bank Statement Balance: $1,680.00

LESS: Outstanding Cheque – not yet cleared
Property Tax payment June 30th ($500.00)

ADD: Oustanding Deposit – cleared in July
Instant Teller Deposit after hours + $600.00

EQUALS: Adjusted Bank Statement Balance: $1,780.00

Important Observations

* Both the adjusted bank statement balance and adjusted cheque book balance agree (this is the “reconciled balance”)
* You do not adjust your cheque book balance to the bank statement balance (you only adjust for items that you do not have recorded already)
* You do not claim your bank statement balance is in error and complain to your bank manager to put money back (otherwise you will look like a fool)

AND THAT’S HOW YOU RECONCILE YOUR BANK!

The only journal entry that the bookkeeper would make in this situation, is

DR: Bank Charges – $20.00
CR: Bank – ($20.00)

AND NOT:

DR: Cash Shortages – $120.00
CR: Bank – ($120.00)

OR WORSE YET:

(no journal entry – but instead a letter is written and delivered to the attention of the Bank Manager to inform them of theft by their tellers or computer)

And, the final G/L Balance at the June 30, 2009 would be: $1,780.00 – a balance inbetween the unadjusted cheque book balance and the ending bank statement balance

Grrr …

I hope that makes sense .. it’s one of the little things that irks me in my ‘dayjob’ ..

A lot of my clients ask me all the time if they can destroy their financial records e.g. from 2002 now – since it’s six years ago – and I thought I would post my views what CRA means by the following news release.

The following is now available on the CRA Web site:

Did you know…

That as a general rule, you must keep records and supporting documents, which are required to determine your tax obligations and entitlements, for a minimum of six years?

Whether you have electronic or paper records, you may destroy your records earlier than your required retention period if you receive written permission from the Canada Revenue Agency (CRA). To get permission, you or an authorized representative must apply in writing to your tax services office and provide the reason for your request. Business owners (including partners, directors, and officers) who have registered for My Business Account can check their list of authorized representatives online at www.cra.gc.ca/mybusinessaccount.

If you are uncertain of your required retention period or wish to determine whether you must obtain written permission from the CRA before destroying your records, visit www.cra.gc.ca/records

SOURCE: CRA Newsroom

In general terms, Canada Revenue Agency will probably only review you for the last 3 years. If they find something worth investigating, they can go back another 3 years (hence the 6 year guideline). But, this term starts at the end of your last assessed income tax return. So, for instance – if you are just filing your 2008 income tax return and it has not been assessed yet, they can still review your 2007, 2006, and 2005 returns. And, if they find something in 2005 income tax return, can also request to review 2004, 2003, and 2002.

However – there are two things that you should note:

1) This rule doesn’t apply to fraud or income tax evasion – if they have good reason to believe this, CRA can go back indefinitely.

2) The years in review are subject to review 100%. For instance, if you have a rental property in 2002 being reviewed for repairs and maintenance costs, CRA can request to review all information about this rental property since you purchased the property.

This is quite true for any business, or person with a business or rental property or any self-employed income (IN MY HUMBLE OPINION) …. If you have assets – start a permanent file and KEEP everything – until you no longer have a business or are self-employed – or sell that asset … that is, for six years after you sell that asset actually!

Electronic Data and E-Commerce

With the internet and business online becoming more popular .. “keeping records” also means keeping records of your computer data that may not normally be kept, as if you created that data. This is and will continue to be one of the hardest challenges, with the new technology and new computers always being updated. Note the final paragraph of this CRA tax tip:

Backing up records

You should make back up copies of all your business information that has been recorded on rewritable media, such as computer hard disks, floppy disks, CDs, DVDs, tapes, and cartridges. This will ensure that you do not accidentally lose, delete, or erase this information.

You should store the media containing the recorded information in an environment free from hazards that could affect the media. These hazards include magnetic fields, direct light, excessive moisture, and temperature extremes.

When you keep back-up records in a different medium, you should follow the media manufacturer’s suggested procedure. You should give particular attention to the suggested shelf life of the medium.

If you contract with an outside party for the retention of your electronic records, you are responsible for ensuring that they are made available upon request.

Requirements for backing up electronic files

When you keep backups of your electronic files, you have to ensure that the backed-up files can be restored in a format that we can access and use.

SOURCE: CRA Business Topic News
READ MORE: Here

Keep your records to support your income tax and benefit return

Another news release is now available on the CRA Web site:

News Release

Ottawa, Ontario, April 8, 2009 … Canadians who plan to file their income tax and benefit returns electronically, or who do not file information slips and receipts with their paper-filed return, should keep their tax records on hand in case they are contacted by the Canada Revenue Agency (CRA).

After returns are filed, the CRA begins work to verify the income reported, as well as the credits and deductions claimed. These reviews are an important way that the CRA makes sure that Canadians are paying their taxes. For the 2007 tax year, about 2.8 million individual returns were reviewed and an extra $889 million in tax was assessed by the CRA.

Some of the first reviews of deductions and credits are done when returns are filed, and before taxpayers receive their notice of assessment. However, most reviews take place later in the year, as the CRA works to verify the information on an individual’s return and compare it with the information provided by other parties, such as an employer, a spouse, or a common-law partner.

During this review process, the CRA may contact taxpayers to ask for more information on income sources or dependants, and may ask for copies of receipts or information slips to support claims, related to:

* medical expenses
* charitable donations
* child care expenses
* spouse or child support payments
* moving expenses

Keeping your records on hand makes it easier to respond to these requests, and will help you explain your tax and benefit situation to the CRA if you do not agree with your reassessment.

Receiving a request for receipts or documentation does not mean you are being audited by the CRA. When an individual is selected for an audit, the CRA tells them that their tax and benefit situation is being reviewed and calls to arrange a meeting to begin the audit.

For more information about reviews of returns by the CRA, go to www.cra.gc.ca/reviews.

SOURCE: CRA Newsroom
I recommend that all my clients at least familiarize and read Canada Revenue Agency’s “Records” page – at least once – www.cra-arc.gc.ca/records/

Well .. you might be sitting in your rocking chair wondering if it’s still possible to reduce some of your income tax that you will owe for 2008 .. and then look at the calendar and realize that it’s December 31, 2008 now – and time is running out!!

EMPLOYMENT INCOME

* Deferral of My Paycheque

If I were an employee receiving a paycheck on the 15th and the end of the month, I might consider asking my employers to withhold my cheque until 2009. Amounts paid in 2008 are taxable in the year received. Of course, in the scheme of things 2009 will have one extra paycheque included in your earnings.

* Payment of Employment Related Expenses

If I were part of a union, I might pay my union dues or any other work related dues that you normally deduct on your tax return – for the following year in advance. Receipts issued are based upon payments they receive in a calendar year.

INVESTMENT INCOME

* Stock Losses etc

Unfortunately, there is nothing that can be done today to help me reduce my taxable income, as dispositions of capital property must be realized in the accounts, and I believe in 2008 December 22 was the magical date you needed to clear the transactions .. Dang you weekends of 2008!!

* Investment Expenditures

I do have investment income, and as such .. investment related expenses are deductible if paid in the calendar year. These type of expenses could be interest on investment loans, investment couseling fees, safety deposit box rentals, and yes .. your accounting fees.

RENTAL INCOME

* Minor Maintenance

If I owned properties, I might incur expenses to remove the snow, or for the performance of minor repairs and handyman work around the property.

* Major Maintenance

If I owned properties, I might decide to upgrade my electrical or plumbing and / or even purchase major appliances that may be supplied in rental properties. Unless these are replacements of existing assets (like non-working stoves etc) generally these improvements and assets are capitalized and only a portion of the capital cost allowance (depreciation for income tax) would be recorded. One half normal rates are taken, but if you were planning to purchase assets in the next few weeks anyway .. you get a bigger bang for your bucks by purchasing the asset today. You might want to note that you should not only pay for the items today, also take possession today.

BUSINESS INCOME

* Deferrals

Generally, it doesn’t matter when you receive your income .. if it is earned in 2008 you should accrue the earnings in 2008, not when received. However, the good news is that you are also able to accrue expenses used to generate that income. So, even though you don’t actually pay for expenses today – as long as you engage the service, receive the products or purchases today, or incur costs that help promote or sell products or used to collect monies from receivables .. they can be deducted.

* Last Minute Expenses

I always buy my liquor for gifts and to have around for promotion in my work-at-home space around Christmas time, so I am covered already but *cough,cough* if I didn’t do that by now, I could probably run out December 31st and get my gifts covered. Because I do a lot of personal income tax returns and such, last week I stopped over at my local Office Depot and loaded me up on copy paper, Post-It notes and staples etc, even though I probably won’t need to use them until mid-January or so.

* Asset Acquisitions

Pretty much same reasoning with both the above deferral paragraph – and the rental major maintenance paragraph above. If you are purchasing a vehicle, that may be financed (and not paid today) .. be sure to take possession of any major asset purchase today, December 31, 2008. Do you need any new office furniture? Office chairs? Bookshelves?

* Bonuses to Employees

If you are going to give your staff or employees a bonus anyway, and didn’t during the Holidays and now feel like a scrooge .. PAY your employees today to claim the deduction. For those considering ‘bonus’ payments to spouses, children and/or relatives .. I would suggest you cough up the money, and pay it. Do not redeposit into a shared bank account, or presume it doesn’t matter because you have a joint bank account.

* Business Use of Home Office

If you are self employed – and claiming a portion of your house expenses against your proprietorship business income, pay your Utility bills today (heat, lights, and water) at least to include the payments in this year’s calculations

* And speaking of being Self-Employed …

Every December 31st I go to my local SuperLube and get an oil change .. just so I can get a factual documentation of the mileage reading on my car at the end of the year. This way, when I calculate personal vs business miles – it is quite easy because I know exactly how many kilometers I have driven during the year.

MEDICAL AND DONATIONS

* Medical Expenses

If I would have thought about taking an eye test recently, I probably would have purchased new glasses if ended up needing a new prescription and be sure I paid for them before the end of the year. I’ve recommended to a few clients who are paying monthly payments for their child’s orthodontist billing that if they can afford to pay off the dental bill .. do so before December 31st.

Also – you can deduct medical expenses for any 12 month period ending in the year, so you would have to double check your 2007 unclaimed medical expenses and see if it pays to claim a different period this year other than a calendar year.

* Charitable Donations

December 31 is the last official day that you can donate to a registered charity and receive an official charitable donation receipt for 2008. Receipts are either mailed before the end of February 2009 or can often be downloaded straight off of the internet now.

One Of The Best Ways To Figure Out What You Can Deduct

… is to look at your last year’s return. Don’t take advice from someone like me or other information that you find on the internet. Look at your last year’s tax return, ask your own accountant or tax preparer questions, and even check out CRA’s website cra.gc.ca or just do a google search!

The new 2009 tax forms come online January 6th 2009 and I know myself, I probably won’t be upgrading my software until the end of February or first week of March 2009 (I concentrate on T4′s T5′s etc first) … but, here’s a screen image of the 2007 income tax returns.

At 11:07pm on July 27, 2008 (while on vacation) I cleaned up my Gmail account, and went into all of my cPanel accounts and began to forward all of my email to the Gmail address. I wrote about this on my post called The GMAIL Experiment and I will now display the results.

First Of All …

I must admit, Google’s spam control is pretty good, although not perfect. I also used my Spam control for automated posts that come in, that are NOT spam, but I didn’t want to see in my InBox. I must admit, as well, when I marked these unwanted emails (Report Spam) .. they pretty much stayed in the spam section! I didn’t have to worry about seeing them again. And, if that’s not interesting enough .. every day I would review the last 100 spam emails, and only had to unmark only about 20 emails (Not Spam) in about 2000 emails that were reviewed. And, after looking at the figures below, you ‘ll see why I say this – if you have sent me an email and it accidentally got routed to my Spam section in Gmail .. and you haven’t heard a response back yet – email me again please!

From July 28th to August 22nd .. the following is a 26 day period while I was on vacation, and up to midnight last night.

My InBox

During the 26 days of my GMail experiment, I received 1822 emails in my INBOX that was not spam, and each email required a direct response by me. This averages to be 70 actual legitimate emails per day.

My Spam Box

During the same 26 days of my GMail experiment, I received 36,231 Spam emails in my SPAMBOX. That averages out to 1,394 emails per day. This would seem to confirm that I really do receive (1,394 + 70 = 1,464) over 1400 emails per day!

My Conclusions About Using GMail

I don’t have to be a rocket scientist to discover the benefits of “living in the cloud” and I have personally experienced a revelation. I have decided to permanently use GMAIL as my email client of choice. When you reach a level as I have, and receive over 1,400 emails a day .. I have to continually check for new emails, and before – my Eudora was checking emails every 10 minutes.

The problem with doing this, was that every day – I mean EVERY day – I would get that white screen at least 4-5 times a day and had to continually reboot my computer, which is time lost. If I didn’t have my email checking every 10 minutes, all I needed was someone to forward me a .WAV or .MP3 file and then it would take forever to download the emails once in a day.

Case in Point: On July 27th, I went into all of my cPanel accounts, and FORWARDED my email to my GMail account. Unfortunately, for me … I didn’t realize at the time that all it does is forward a COPY! When I came back on August 13th, there was still about 27,000 emails to download in my Eudora. I have been unable to effectively download ANY of my emails, without getting the white screen, and as such – everything I have been keeping for the last 5 years online with Eudora – is lost. For prosperity, I have placed a few copies on a several memory sticks and placed them in my drawer, hoping that on my next computer purchase – with mega memory and no other crap on it .. I can reload it and try to recover – if I really needed to.

But… since August 14th, since I’ve been home and working on the computer all day (and all night ) … using only GMail has saved a tremendous amount of resources on my computer. I have been using Firefox 3 more and more these days, and it’s a memory hog and may crash my system – especially with Eudora. My computer has not crashed once. I like that!

GMAIL: How I Use It

I thought that I would mention, that I am using Gmail to send emails from my other addresses, so you probably won’t even know I am using GMail (Google mail/settings/accounts to do that). I always have my Google Talk open, and when I see a lot of new mails, I check my mail. For stuff that I should be taking care of, I immediately “STAR” these emails, then mark everything as read. Generally, a few times each day I will click the Starred link in the left sidebar and clear the starred emails in my InBox (mostly the ones requesting social intervention, voting, etc, or ones I need to respond to). So far .. so good.

What is “Living in the Cloud”?

I’ve been trying to do this for the past few years now, but have really only heard this term in the recent months. I believe there has been speeches at Podcast and other famous blogging conventions that has happened in 2008, but I will not point any fingers to who first coined that phrase.

Basically, “living in the cloud” … is an online concept … where you are able to walk up to ANY COMPUTER ANYWHERE WITH AN INTERNET CONNECTION .. be productive … but also access all of your data! You are probably living a little in the cloud, like me .. and like a lot of people. Do you store digital pictures on Flickr? Do you listen to internet radio?

Currently, if you didn’t know – I’ve got a lot of blogs. What you probably didn’t know – for sure – is that I also have several GMail accounts! Currently, I am backing up every blog of mine .. every day .. and emailing the backup to one of my GMail accounts. GMail is giving me 7GIGS per account, and I’m using GMail as my own personal online data storage center!

Paul Stamatiou examines How To: Live The Cloud Life and it’s a great insight for me to realize, that I CANNOT live the cloud life that I desire. Currently, with my DSL connection, I am downloading at about 5mp/s and uploading about 1mp/s but, I think you need more of a T1 connection! In Paul’s example, he is uploading over 25mp/s. I have over 3500 .mp3′s alone, and it would be very costly to upload this to the ‘net.

My Next Step?

I am happy to say, that I have decided to switch my TODO list – to an online program “in the cloud”. While I was at the cottage on vacation, I maintained, developed and kept an upto date ToDo List on my laptop with Vista. Unfortunately, that program somehow doesn’t work on my desktop XP because, well – someone I had either some trial version on this computer, or maybe even a “cracked” version and well, it didn’t work.

I am now using Toodledo program as my online ToDo list – and, although it’s free .. I immediately upgraded to the Pro-Plus version ($29.95 USD). If you click on this link, I do not make commissions but, it is a referral link. They will keep track of any of you who decide to try it – and likes it – and upgrades to the Pro Account ($14.95) or the Pro-Plus account as a referral for me. And, if you do – for every 3 people that upgrade .. I might earn a month extended subscription for each of you! If you feel you do not want to support me, just do a search for “toodledo” and I won’t get any benefit from that.

I wanted to upgrade to the Pro account, because it retains the completion of tasks up to 2 years .. and the Pro-Plus upgrades that to “forever” plus, you have the ability to upload files up to 1GB of storage. I thought I would upload a few ZIPPED installed programs that I might need to download and use locally at clients in the future. Previously, I was just uploading to a secret folder on one of my domains.

Also – I can even create new TODO tasks by sending a “tweet” with my twitter account! How cool is that? If you don’t need any online storage or a reason to retain history of completed tasks .. it’s quite the utility with a great price – $FREE

Toodledo.com is an easy to use, web-based to-do list. Keeping track of all your tasks will help you avoid disorganization, stay motivated and be more productive. Check it out.

I work in my home, on the second floor. During the summer, it gets too hot – because heat rises. In the winter, it’s quite the opposite – I’m freezing! We keep our natural gas fireplace on most of the time, and the thermostat is on the main floor. In order to bring heat up to the second floor, the main floor has to either turn into a furnace .. (which, I don’t mind) .. or we have to spend money redoing our heating system and maybe even consider dual furnaces and the like!

So .. I have been using a “Space Heater” for the past 4 years. Last week – it died on me! I finally moved up from the cheaper $19.99 space heater to the $59.99 model at Canadian Tire, although with the accumulated Canadian Tire Dollar money I have .. it only cost me $35.00. This is FAR WAY SUPERIOR than the other one, and oscillates nicely to keep my legs warm, and my office in my home comfortable to work in. If you are looking for a heater for under your desk – and I know how confusing that can be with all the choices – I would recommend you try the one I’ve got pictured below!

I don’t care what you say – It’s hard to be productive while you are sweating like a pig or have heat exhaustion .. and also hard to concentrate and even think when you are freezing your buns off, or wearing gloves .. parkas and hats in your own home office!

My old Space Heater is the smaller one on the right. My new one is the NOMA one on the left.

In May 2008 my wife wants me to move my ‘office in home’ down to the basement. It is cooler in the basement during the summer months, but all the heat is directed up to the main and second floor and is completely freezing in the winter months. I would have to build a rec room or some type of home office. I don’t know if that’s worth it at this stage, or if I can afford to do that.

My father-in-law is Herbert König, proprietor and owner of Corydon Clock Repair here in Winnipeg. He recently turned 73 years old and has been working full time in his leased premises 5-6 days a week, commuting back and forth from his apartment. His stated hours are Tuesday to Friday, Noon to 6pm .. but he was often at his shop before 6am starting his day repairing clocks. Other days he was available by appointment only, but sometimes went into the shop to catch up on his work. He is a busy man!

On November 7, 2007 at 10:30am in the morning .. he was in a car accident.

He was banged up, but is on the road to recovery. It could have been much worse. But – there are and will be permanent effects caused by the accident on both his physical and mental health and well being. At this stage, we don’t know what “back to normal” might be or if it will ever be. He is recouperating. It has been a challenge with communication and memory, but we are hopeful that over time he will recover.

Surprisingly, as he was wearing his seatbelts, there was not much damage to his body, except for the head, face and skull where the glass and steering wheel and his head met. There was some initial reconstructive surgery on his cheekbone and face area .. and lots of swelling, but appearances are almost back to normal. H will probably never see again out of his left eye, as that is where the major brunt of the accident occurred – on his left side of his head. There was a brain bleed which is a brain injury.

He can remember things .. I am convinced of that – but thoughts are elusive and it’s hard for him (imo) to keep a clear focus on these thoughts and gets confused .. and its difficult to communicate.

Then there’s the business. Right now, he is in no condition to even remember certain things about the business, or work in progress, or how he was keeping records, or what work has been promised .. and so on and so on.

That’s where I come in.

I am not a clock repair person, although in the 1980′s our family did market analog and digital watches and the like in one of our merchandising business – I do not pretend they are related in anyway. However, I am an accountant, and able to setup some system in place to see how he’s doing, and keep track of ways with dealing with existing customer claims and antiques currently in our possession. I believe I am quite sociable, and have the patience to deal with my father-in-law’s customers. I am also the only one of all of his daughters or son-in-laws that IS self-employed and able to take time off.

Being able to take time off (as perceived by EMPLOYED individuals) is, of course, difficult to do when you have obligations of your own to contend with. But, with a flexible working schedule .. I’m hoping I will be able to help pitch in and take care of Herb’s business in his absense. Basically, with my EVDO (high speed mobility internet access) card and my laptop computer, cell phone and data memory sticks .. I am “Have-HART-Will-Travel”.

I will be trying to do what I can. Unfortunately, family comes first. Between getting his business under control, visiting him at the hospital and ‘being there’ for my wife and her family … it’s like another full-time job for me. In the last 3 weeks I am already 2 weeks behind on my own work. I’m working around the clock trying to catch up and be in a position to bill clients (and collect) to cover payments .. while every day driving across town in a gas guzzling car. And, that’s not to mention the initial 100′s of phone messages left unattended to for 2 weeks and the approximate 20 or so phone calls I have been getting every day since I changed the shop’s answering machine with my own message to call me on my cell phone!

So .. Apologies to clients .. I know you’re upset and I am truly sorry. But, there is no question of my loyalties at this time. I have to choose, and I choose my family. It’s unfortunate that unlike bones that can heal .. there is no specific timeline guestimate that brain injuries will heal – if it ever heals. I know the next two weeks will be extremely busy as I try to make heads and tails over the Clock Repair Business, its customers and its contents. My wife and family do not need literally hundreds and hundreds of angry customers to deal with. (And no .. it’s not okay that I have my own angry customers to deal with as well). I hope my own customers will bear with me in our time of need, and know that if I can compensate somehow with some discounts on my time or future billings .. I probably will just do that anyway.

And – Meanwhile .. This has really got me thinking

I have to ask myself … What if something happened to me … Who will clean up the mess I leave for me?

I’m afraid to take pictures of my home office and spare bedroom next to my home office and my basement where all of my files are and other classic memorabilia and potential income earning opportunities are located (translation: JUNK) as that would clearly seem to indicate how messy I really am.

If only I wasn’t so organized!~ A messy desk is the sign of genius or something .. isn’t it?

But, anyway I digress. I’ve been buying these 512MB memory sticks from Superstore for $9.99 to store data on them. I don’t want to carry information that helps a thief or someone else to help themselves with my bank account access or passwords to all of my blogging and credit cards and other personal information like that – but, I have included a text file on there WHERE TO LOOK FOR THE 2nd MEMORY STICK TO GET THAT INFORMATION. I am hoping that nobody understands what the cryptic message actually means but, my wifes now knows where to look.

Hopefully, I can document what to do in case of an emergency – but, I haven’t written anything yet.

There are certain papers to be sorted out and located. Claims to file. Client records to return. Receivables to collect. Locations of outstanding bills and debt information. Blogging information and what to do with the HART-Empire Network and its income and expenses. What I perceive to be of value and hopefully encourage not to be ended up in the local dumpster in our parking lot… and other stuff like that. It would be nice if I died suddenly and unexpectedly, that someone logged into all of my blogs and let readers know this – and .. Grrrr! My head hurts thinking about all of that!!! We don’t have a will prepared. It’s too morbid.

And – who has time for all of that??

Well .. not me – BUT – I have to make time to be prepared for the unnexpected – that’s important. And, that’s another 2008 project to add to my list of things to do next year .. besides
(1) be successful and
(2) enjoy life ..

I can add …

(3) In case of accident – Break Glass

October marks the second anniversary of my HART-Empire Network and I published my Year 2 in Review post over on the HART-Empire blog.

There are many people and bloggers out there ALSO celebrating their “Blogiversary” in October 2007 .. and most will hopefully be over at Liz Strauss’ Successful-Blog.com chatting on an all-day Open-Mike comment day!

An Ode To Liz Strauss

If you don’t know who Liz Strauss is, and you blog .. then you are blogging in all of the wrong places! Liz has always been one of my favorite bloggers on the internet. When it was “cool” to just delete spam comments in one’s blog .. she would talk to these spammers and get a conversation going! Soon, you might find that people aren’t all spammers, and some just didn’t know how to be socially active around the ‘net! Mind you, there are times.

Last year, in my Year-1 Annual review of my network .. I published a few poems that I wrote to describe her blog in 25 words or less. Today – a year later – they still apply.

HART’s Hypothetical Entry #1 – HAIKU FORMAT

The Successful-Blog
Your Host Is Always Friendly
Come! Join The Party

HART’s Hypothetical Entry #2 – LIMERICK FORMAT

Bloglines has all of my feeds
I use it to track all my needs
But If you’ve got a business
You too can witness
Why Liz is on my Daily Reads!

SOBcon Event

SOBCon ‘07 is now a part of blogging history, but Liz and a few friends really stepped up and made it a successful event in Chicago, last May 2007. There was about 15 speakers for the event and reading all the reviews about it, everybody had lots of fun! I wanted to go but couldn’t really afford the time to drive down there, or the conference fees. When I mentioned this in passing, Liz offered to make it an easy choice for me .. to drive down there and cover the cost of the fees for me .. and I really *really appreciated that, but still couldn’t find the time to leave.

Needless to say, I hope to see everybody down there for SOBcon Event 2008.

PS: her motto is: You are only a stranger once .. it’s true!

PPSS: Did you know that I am Liz’s Favorite? Yes. I am the ‘teacher’s pet’ if there was one .. as evidenced by the following:

1) I am NUMBER ONE and at the TOP of her S.O.B. list! WooHoo! (aw, don’t be jealous)

2) She acknowledges that I once asked her to fix her feed for her comments, because “half the show is in the comments” and seemed to really like that concept, when engaging with individuals in conversation in the comments!

3) Besides being an S.O.B. .. I”m also a B.A.D. Blogger

And that’s why I’ll be over at the party all day today!

But, in case you have a few minutes or hours of time .. feel free to jump in and say hello. If you want to read what other people think of Liz Strauss, you should get the idea by post #50! Or, by reading the following recent posts on her blog:

* www.successful-blog.com/1/a-party-wednesday-october-24th-youre-invited/
* www.successful-blog.com/1/minimalist-successful-wish/
* www.successful-blog.com/1/a-birthday-party-picture-invitation/
* www.successful-blog.com/1/dont-seek-success/
* www.successful-blog.com/1/the-currency-talent/
* www.successful-blog.com/sob-business/a-party-invitation-to-646-sobs-successful-and-outstanding-bloggers/
* www.successful-blog.com/1/voices/
* www.successful-blog.com/1/your-mothers-daughter/
* www.successful-blog.com/1/the-relationsheep-factor-a-successful-blog-birthday-bash-interview-with-the-phil-gerbyshak-and-lisa-gates/
* www.successful-blog.com/1/birthday-poetry-from-the-successful-blog-poet-laureate/
* www.successful-blog.com/1/eastons-something-successful-and-outstanding/
* www.successful-blog.com/1/success-in-the-middle-position/
* www.successful-blog.com/1/sailing-with-kirkness/
* www.successful-blog.com/1/keep-on-shining/
* www.successful-blog.com/1/a-tale-of-outstanding-smiles/
* www.successful-blog.com/1/in-the-annals-of-mists-of-blogospheric-pre-history/
* www.successful-blog.com/1/what-is-success-with-aloha/
* www.successful-blog.com/1/what-we-have-is/
* www.successful-blog.com/1/the-secret-to-a-successful-and-outstanding-blog/ *

So What Are You Waiting For? Drop On By

There is an interesting article in the July issue of TaxMatters@EY (from Ernst & Young), including information about transferring the cottage to the next generation.

From the July Issue:

… A gift of property to a child is considered to be a fair market value disposition. And, although gains on the disposition of personal property are taxable, losses are denied. Fortunately, in the case of a cottage, some or all of the accrued gain can be sheltered from tax using the principal residence exemption – by designating the cottage as a principal residence for a selected number of years of ownership and occupation. Seasonal occupation is sufficient for a property to be considered a principal residence.

Sound interesting! See the calculations on their newsletter!

From the Email Newsletter:

Recap of the E&Y Newsletter…

* examines tax issues surrounding the transfer of a family vacation property to the next generation
* recent changes by the CRA around online university courses that have made a positive impact on this ever-growing trend of distance education in Canada.. and
* a recent Supreme Court of Canada decision on joint investment accounts

See the E&Y Newsletter online

~~~~

Update:

About the Principal residence Exemption .. read Neil McIntyre’s 8 quick facts about the principal residence exemption

In my quest to get internet access at the beach this summer .. I mentioned earlier that I wanted to “Join the EVDO Revolution” .. because …

*Mobility High Speed is the latest evolution of North America’s leading cellular digital technology standard
* I think that’s pretty cool
* Dagnabit! I need Internet Access at Victoria Beach!

Today I officially signed up for EVDO

I went to MTS Connect Centre at Polo Park Shopping Center because that’s where I deal with all of my accounts .. my MTS Tv, my MTS Home Phone lines, my MTS DSL lines .. and my MTS Mobility accounts. I was quite innocent and oblivious to what the real procedure was – and if I was confused, I figured some of you locals might also be confused. Well .. let no doubt be in your mind what to expect, should you want to follow what I’m doing .. because I will be documenting all of this in this blog. You can browse the MTS Wireless Site all about EVDO or read what I write below to get a better feel for what this is all about.

Tools You Need To Have EVDO (Mobility High Speed)

* #0. You need a laptop computer

I’m pretty sure this is limited to laptops, and not available for your desktop. Previously, without free WiFi sections in our city, or connecting to some wireless connection with your own laptop network card .. if you wanted internet access on your laptop, you had to plug a phone line jack into a modem, whether it was a modem card or internal modem. Just like dial-up service on your home, you would be connecting to the internet through the voice lines. I believe you were able to just connect your cell phone into your computer to dial up the internet, but I’ve never bothered to try – having DSL and no laptop. I just never saw the point in getting accessories for something I would never use at the time.

* #1. You need an EVDO Card .. and yes – it’s extra.

The MTS Connect Centre does sell EVDO cards for, I believe, $199.99 CDN provided you sign up for a minimum 1-year plan. If you sign up for a 2-year plan however, the price drops to $99.99 CDN or $49.99 CDN or something like that .. I wasn’t really paying attention, because all I heard was that if you sign up for a 3-year plan .. the EVDO card is provide to you for free. Here is a picture of my actual EVDO card and software and case. They even provide a pocket travel pouch I suppose, for storing in the laptop carrying bag.

* #2. You need to have a Digital Mobility Access Plan

If you have ever looked to upgrade your current cell phone into one with a mini keyboard and has internet access – you probably already know that this turns any simple $30 plan into something like $75. It’s no different for EVDO plans, because it’s the same plan. The minimum every single digital plan with internet access seems to be $45 CDN per month. This is all before taxes of course (PST 7% and GST 6%). According to the rate plan sheet, this $45 internet access is similar to Email and Surf 8 MB Plan. So, if you have a Blackberry for instance, that can access the internet – that’s probably how much download MB transfer you need – because, all you really will be doing on your blackberry, in addition to text messaging, might be checking emails, sending emails, checking stock prices, reading online news .. etc etc.

Now – at the beach, I plan to do more than just check email and scan headline news. I will be blogging during the nights, and probably downloading a crapload of emails each day (about 900 or so) just to keep on top of everything and stay ahead of the game! But – how much time do I need? How the hell do I know?

* #3 – Pick the Plan You Need

I chose the maximum $90 plan, with 500 MB Email and Surf Download transfers – whatever that means. As a new account, I will receive $30 discount. I was pretty much prepared to pay anything *THIS YEAR* to have internet access at the beach, because I wanted it – and wanted to try it out. So! I’ve got 3 years. But, I do not have to have the $90 rate the full time of the contract. I am allowed ONE free switchover to another rate (e.g. downgrade) if I need it, and that’s what I will be doing in October, after Beach Season is over. Next year, in June I will change it again to the max (if needed), and they will charge me $25.oo CDN for the privilege of being allowed to change a contract in mid-term, more than once. But this $25 charge saves me $45 monthly for half-a-year, so I ‘aint complaining.

I don’t know why they even bother to list the $20 plan .. the minimum is $45/month plan. I just don’t get it. However, I will be getting a $35 CDN activation fee and a new cell phone number assigned to me. They were going to just combine the two “cell phone numbers” with my other cell phone bill, but because I’m on the buddy system with my wife and already have two cell phone numbers on my current MTS Mobility billing – I will be getting a new statement.

I’m disappointed that there is no way in the world – at this time – I can tell how much bandwidth transfer download MB I have used – until my monthly bill has arrived. I can’t logon anywhere and see my stats, or phone up anybody. Until I know exactly how much I will use on average .. I rather be over than under and charge extra dollars per extra 1-MB used. Hopefully MTS can create some site to help us monitor our usage in real time eventually.

* #4. Install the software, plug in the card and ….

Well .. I can’t tell you this part yet – because I haven’t received my new laptop computer. However, good news! I ordered the computer on May 31, 2007 .. today I received PART ONE of my order – the accessories. Apparently, Dell Canada is shipping all the accessories immediately out of Mississauga, Ontario now … and the Laptops and usually assembled down in Texas and come 3-5 days later .. (at least, that’s what the Purolator Shipping Depot at the Airport said). I am expecting to receive it by Friday.

My New Laptop Accessory #1

Oh sure .. the 1 GB hard drive stick that fits on my keychain has been very handy for me, in fact it replaced my Toshiba 40 GB hard portable external drive in its simplicity of storing just the data I need .. but ..

.. C’mon! This is a 120 GB portable external drive with USB .. You can never NOT have enough backups .. in my humble opinion .. and this will help do that! Neato, eh?

Visions of my Retirement?

I really think all of this can finally replace my visions of grandeur in winning the Lotto 6/49 Lottery or, a mysterious and long-lost billiionaire relative including me in his last will and testament ..

I think it would be quite cool, sitting on the porch with my wife … looking out on Lake Winnipeg .. with my trusty laptop .. my Papillon dogs .. and EVDO internet access .. with a portable external hard drive to listen to some MP3′s … the smell of fresh baked bread from the bakery on the counter .. blogging or checking my emails .. surfing the internet .. then, jumping into the lake for a nice refreshing swim before starting the BBQ … It’s almost perfect.

Have you been following the Exchange Rates Lately?

Here are the average annual exchange rates for the following years by CRA

1995 – USD – 1.3726
1996 – USD – 1.3618
1997 – USD – 1.4267
1998 – USD – 1.5422
1999 – USD – 1.48584024
2000 – USD – 1.48520240
2001 – USD – 1.54841633
2002 – USD – 1.57035976
2003 – USD – 1.40146175
2004 – USD – 1.30152024
2005 – USD – 1.21163240
2006 – USD – 1.13409360

Translation: For $100.00 USD in 2006 … we would convert it to $113.41 Canadian dollars.

For 2007 .. Here are actual exchange rates according to the Bank of Canada, on particular days …

January 1, 2007 ==> USD – 1.1649
January 15, 2007 ==> USD – 1.1681
February 1, 2007 ==> USD – 1.1755
February 15, 2007 ==> USD – 1.1639
March 1, 2007 ==> USD – 1.1713
March 15, 2007 ==> USD – 1.1758
April 1, 2007 ==> USD – 1.1561
April 15, 2007 ==> USD – 1.1310
May 1, 2007 ==> USD – 1.1089
May 15, 2007 ==> USD – 1.0977

Friday, May 25, 2007 ==> USD – 1.0796

This was the lowest the exchange rate has been in the past 10 years.

From 1949 to the present

All-time High was: High (18/01/2002) – 1.6125
All-time Low was: Low (20/08/1957) – 0.9422 (Canadian dollar actually worth more!)

QUESTION: WHY IS THE RATES GOING DOWN?

In the past, when exchange rates go up and down here in Canada .. I like to look at it from a simple point of view .. it’s either:

* Our Canadian Prime Minister (Stephen Harper) is doing something right, or
* The USA President (George W Bush) is not doing something right …

Yes – I’m a simpleton and can only offer the above two possible explanations. If you can offer other possible suggestions or explanations why the rates are going down .. feel free to add them in the comments!

PS: In Canada: We Report Our Earnings in Canadian Dollars

For income earned throughout the year but in a foreign currency, like USD dollars (instead of CDN dollars), Canada Revenue allows you to choose either the actual exchange rate on the date of the transaction, the average exchange rates during the months of the transactions, or the average recognized exchange rate for the year.

For myself and my clients, I always choose the best scenario that benefits me or my client. For instance, with stock transactions .. I want a higher exchange rate for purchases and a lower exchange rate for sales transactions. I will compare the actual daily exchange rates to the CRA average rate and make my choice. Once chosen however, I always use that method and never change the costing calculations in the future. However, I will mix them up within the same non-RRSP investment account.

On one particular client of mine, who is not a day trader, but is quite active in the online investing activities .. had a lot of transactions trading one particular stock in the USA markets (NASDAQ). I calculated what the actual converted costs and selling prices would be in Canadian dollars using the actual rates from the Bank of Canada, and compared it to the CRA average rates, and using the actual rates … the net capital gains for the year was reduced by almost $20,000! It was worth the extra hours and fee added to my client’s billing. On another stock, it was more advantageous to use the average rate, although it knocked off just a little of the gain – every bit helps. In the Stock Portfolio section within my Tax Software for the client, I would indicate which method I used to calculate the adjusted cost base (ACB) for the stock, to remind me to continue with that method next year – if there were shares on hand at the end of the year.

Comparing The Dollar to Gas Prices in Winnipeg

I know .. I know .. there is no comparison .. but, I do watch for the lowest gas prices at the pumps around Winnipeg, Manitoba .. I can’t seem to find an easy chart of the exchange rates for 2007 (and am too lazy to recreate it myself on Excel) .. but I wonder how the exchange rate decreases compares to the gas price increases?